Berlin on Monday unveiled a new, “limitless” program that guarantees 100% of loans banks make to small and medium-sized companies, filling a hole in an unprecedented aid package. But while Berlin may be flattered by Botin’s praise, her suggestion on how to finance such a plan across the continent may be more controversial.
“Let’s ensure all EU companies, especially the smaller ones, receive equal opportunities to survive,” Botin said in a series of posts on Twitter Tuesday. “For those EU members that cannot offer programmes of this scale due to fiscal constraints, Brussels should step in.”
Botin’s comments come as EU finance ministers seek to endorse a list of measures worth more than half a trillion euros to mitigate the impact of the coronavirus on the region’s economies. While there’s broad support for having the euro-area bailout fund offer credit lines to all the bloc’s members, demands from southern countries for joint debt issuance have met with resistance in Germany and other northern nations.
In an opinion piece for the Financial Times, Botin earlier called for a Europe-wide plan to finance small and medium-sized enterprises, either through a so-called coronabond or a common bond backed by the EU.
Spain’s government so far has said it will guarantee as much as 100 billion euros of loans for companies and the self-employed. The state credit agency is backing 80% of loans to smaller companies and the self-employed, and 70% for larger corporations. The first tranche of 20 billion euros sold out in a week,
“Action has to be fast and simple,” Botin tweeted. “This is the challenge for EU finance ministers when they meet later today.”
To contact the editors responsible for this story:
© 2020 Bloomberg L.P. All rights reserved. Used with permission.